Here’s Why Microsoft Bought This Hot Messaging Startup

June 16, 2016, 7:49 PM UTC
World Economic Forum - 2016
DAVOS 2016; World Economic Forum -- Pictured: Satya Nadella, Microsoft CEO, takes part in a panel discussion at the annual World Economic Forum in Davos, Switzerland, on January 19, 2016 -- (Photo by: David A.Grogan/CNBC/NBCU Photo Bank via Getty Images)
David A.Grogan—CNBC NBCU Photo Bank via Getty Images

Microsoft’s vision of a future in which people converse with computers and smartphones instead of twiddling with them got a bit clearer on Thursday.

The technology giant said it bought a small startup called Wand Labs, which builds messaging technology for apps. Wand’s chat app connects with some of the other apps installed on a user’s phone and shares those app features with other users regardless if those apps are installed on their phones.

For example, writer Steven Levy described in a profile of Wand that its app allowed him to learn that his friend was listening to the Neil Diamond song “Kentucky Woman” from his stereo even though Levy doesn’t use the Gracenote app on his phone.

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“From there, using other plug-ins already in the Wand universe, I could read the lyrics (Musixmatch), listen on Spotify, watch a music video of the song on YouTube, or buy it from Amazon,” Levy wrote of his experience.

Microsoft said the startup fits with the company’s investments and research into advanced communication technology, according to a blog post by David Ku, a corporate vice president of Microsoft’s information platform group. Microsoft CEO Satya Nadella explained during the company’s recent developer conference that he believes “the power of human language” will revolutionize the way people interact with machines and will be as game changing as the creation of the Internet.

From Ku’s blog post:

Wand Labs’ technology and talent will strengthen our position in the emerging era of conversational intelligence, where we bring together the power of human language with advanced machine intelligence — connecting people to knowledge, information, services and other people in more relevant and natural ways.

Terms of the deal have not been disclosed. Regardless, the deal makes sense for Microsoft (MSFT) because much of the Wand’s technology overlaps with what the tech giant hopes to accomplish through its Cortana digital assistant app and newly-created chat bots. During Microsoft’s Build developer conference in March, company executives demonstrated how users could speak to Cortana inside Microsoft’s Skype Internet calling tool and then talk to a chat bot, which could pull off a variety of tasks such as booking hotel rooms or coordinating dessert deliveries.

Wand’s technology and staff seem to have the ability and know-how to pull off similar feats through its own app—at least based upon what’s currently known. The startup has only been around for a few years, and its app hasn’t been thoroughly battle-tested in public to see how well it can pull off what it claims to do. Wand CEO Vishal Sharma said the company will shut down its service, but users should ” expect to see familiar elements of our work in the future.”

It’s likely that the startup’s team possesses the technical chops that Microsoft craves, and users could see those features incorporated into Cortana or the company’s recently created chat bots, which are still a work in progress.

Microsoft experienced a research project hiccup in March when its Tay chat bot went haywire after Internet hooligans inundated Tay with racist, sexist, and other offensive remarks on Twitter. Tay absorbed all that bad mojo, turned around, and began to communicate with other Twitter members using its own distasteful lingo.

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Clearly, communication and related natural language processing technology is difficult to pull off, and Microsoft needs all the talent it can get to achieve its goals as competition heats up from companies interested in pursuing the same goals, including Google (GOOG), Facebook (FB), and Apple (AAPL).

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